Aspen shares surge 15% after announcing placement
Singapore
SHARES in Catalist-listed Aspen (Group) Holdings rallied 15.1 per cent or four Singapore cents to S$0.305 by the closing bell on Monday, after it announced a proposed placement to raise up to S$23.8 million.
Some 121.4 million shares changed hands, making it one of the most heavily traded counters on the Singapore bourse for the day.
The Malaysian property developer and soon-to-be glove maker is proposing to place up to 100 million new shares, at an issue price of 23.8 Singapore cents apiece. This comes after the firm last month said it intends to transfer its listing to the Singapore Exchange's (SGX) mainboard in a bid to boost visibility in the market to help future fundraising efforts.
The placement price represents an 8.5 per cent discount to the counter's volume-weighted average price of 26.01 Singapore cents on Nov 5, being the last full market day preceding the signing of the placement agreement.
In a bourse filing on Monday, Aspen said it decided to undertake the placement to meet the minimum shareholding spread requirements applicable to mainboard listing applicants, and to strengthen the group's financial position and flexibility to capitalise on growth opportunities.
Shares of Aspen have more than tripled this year from their Dec 31 close of 7.9 Singapore cents, with all the gains coming after the company announced it would diversify into glove-making.
The stock now trades at 53.54 times its historical earnings, according to Bloomberg data.
PrimePartners Corporate Finance is the placement agent for the proposed placement, which is not underwritten. PrimePartners has agreed to procure purchasers and/or subscribers on a "best endeavours basis", Aspen noted.
The placement will represent 9.2 per cent of Aspen's enlarged issued share capital of 1.08 billion shares, assuming that all the placement shares are placed out.
Based on this assumption, net proceeds from the placement after deducting estimated fees and expenses amount to S$23.2 million.
Of this sum, 80 per cent will go towards capital expenditures for the growth of the group's business - including the construction of the first phase of its rubber glove manufacturing facilities. The remainder will be used for general working capital purposes.
On a pro forma basis, Aspen's loss per share would be narrowed to 1.28 sen after the proposed placement, from 1.40 sen, while its net tangible asset would increase to 42.69 sen from 39.78 sen.
